ICYMI: CPUC Hearing Witnesses Confirm: Revised Rooftop Solar Decision Penalizes the Poor

Posted on November 18, 2022

SacramentoOn November 16, the California Public Utilities Commission (CPUC) held oral arguments to hear feedback in response to its November 10th Proposed Decision (PD) regarding the state’s rooftop solar subsidy program, Net Energy Metering (NEM).

Several witnesses including consumer and ratepayer advocates, labor and former regulators raised concerns that the PD, as currently drafted, fails to adequately fix the multi-billion dollar cost burden imposed on non-solar customers, who are mostly low-income and renters.

Here are some excerpts from the testimony:

Matthew Freedman, The Utility Reform Network

“We’re disappointed with the new proposed decision because it represents another missed opportunity. The PD’s core flaw is its failure to reduce the solar tax, and by the solar tax, I mean the rapidly growing portion of retail rates that all customers pay to subsidize participants in the net metering program. Record evidence shows that the annual cost shift associated with legacy net metering was $3.4 billion in 2021.”

“…the cost shift is poised to grow substantially in the coming years under the modest reforms in the proposed decision.”

Matt Baker, Director, Public Advocates Office at the California Public Utilities Commission

“…NEM is one of the three main drivers of these rate increases.”

“I think the proposed decision says it best, quote, ‘the financial burden on the shrinking pool of non-participants is unsustainable and will fall disproportionately on lower income customers.’”

“The commission must find ways to address legacy NEM costs, and equitable ways to recover fixed costs. Looking towards 2030, the cost to non-participants under the new PD are still expected to increase by $2.8 billion a year to $7.6 billion. This is largely the result of subsidies to current customers.”

Rachel Koss, Coalition of California Utility Employees

“Rooftop solar customers pay nothing for the grid they use every second of every day. There is still a gigantic cost shift under this PD. The solar customer’s entire investment will be paid back in less than 10 years. The next 10 plus years is just free money from non-solar customers.”

“This is a phenomenally generous PD, too generous, and they [solar industry] complain it’s not enough. If this PD continues a huge handout to an insatiable industry, do not let them tell you this is unfair or deprived people of solar.”

“… the industry’s framing of this as good solar versus bad monopoly utilities is totally untrue. You know, utilities don’t make a single penny based on the amount of commodity they sell. … The only profits at stake are the profits of the rooftop solar industry. “

Susan Tierney, Analysis Group

“…this PD puts in place a perpetual cost shift, when it should be putting in place a plan to sunset it.”

“The PD does nothing to keep the tax imposed by current solar customers from growing as rates increase.”